A mortgage is, quite simply, a specific loan for a specific purpose, and in this case, a mortgage is a loan one gets when buying a house, condo, or another type of real estate. As the buyer, you are a borrower, and the mortgage comes from the lender.
Where do I go to get a mortgage?
When looking for a mortgage, you have two choices. You can either go with a mortgage banker or you can use a mortgage broker. The difference between the two is quite simple. A mortgage banker, who may also be referred to as a loan officer, is someone who works specifically for an organization that makes and services mortgage loans, whether it’s a bank or credit union, or a mortgage-specific company such as Quicken Loans. A mortgage broker on the other hand is some who arranges a mortgage loan between you, the borrower, and the lender; usually, a fee is involved when you use a mortgage broker, but a mortgage banker does not have one.
If I don’t have to pay a fee to see a mortgage banker, why would I use a mortgage broker?
As explained, a mortgage banker is someone who works specifically for the lender, whether it’s a bank or a mortgage company. This means that the mortgage banker, or loan officer, is limited to selling his/her organization’s own products, which may not always be a good fit for the borrower.
A mortgage broker, on the other hand, has access to all kinds of mortgage products through a variety of companies, and therefore is in a better position to help a borrower the best product to suit his/her needs.
With all of the recent scandal involving the housing industry, how do I know whom to trust?
Both mortgage bankers, or loan officers, and mortgage brokers are held to professional responsibilities, as well as legal and moral responsibilities, to fully disclose loan terms and liabilities in order to prevent fraud. However, you should also know that mortgage brokers are required to be licensed with the state, are governed by the state, and are personally held accountable for fraud for any and all mortgages brokered throughout the life of the mortgage. A mortgage banker, or loan officer, is not required to be individually licensed, but falls under the umbrella license of their current company, whether it’s a bank or mortgage-specific company.
How do I go about finding a mortgage banker or mortgage broker?
As with anything else, the best way to find someone to help you obtain a mortgage is to shop around or ask for recommendations from trusted friends and family. Be sure to do your own legwork, though. Not only does this make you a more knowledgeable consumer, but your friend Joe’s mortgage person may only work with people with low credit scores whereas your credit score may make you a valued customer for any company offering mortgages. Visit websites of banks and credit unions to find out their rates. Shop the websites of mortgage companies such as Wells Fargo or Quicken Loans. Even give Lending Tree a try. Be sure to have an approximate idea of how much you want to spend on your home, how much you can afford as a down payment, and what your general credit rating may be. This will give you a great idea of what rates are being offered and where, and make you a more knowledgeable consumer when you sit down in front of someone.
If you’ve done your homework and decided that a bank or other financial institution is the way you want to go, simply make an appointment and one of their mortgage experts will help you on your journey to home ownership.
